Netherlands consumer goods

Sales of healthcare devices boost Philips’s revenue

January 24th 2017 | Netherlands | Non-food products | Philips

On January 24th Royal Philips NV, a Dutch consumer technology and medtech company, reported a 2% rise in sales to €7.2bn (US$7.7bn) for the fourth quarter of 2016. The company's comparable sales rose by 3% during the three months ended December 2016, with strong growth in Latin America and China offsetting sluggish sales in mature markets such as Western Europe and North America.

The company, which spun off its lighting unit for €4.5bn in May 2016 to focus on its healthcare equipment business, reported a 5% rise in comparable sales of the healthtech unit. This increase helped offset a 3% sales decline in its lighting unit. Its three major divisions under the healthcare business – personal health, diagnosis and treatment, and connected care and health informatics – posted a 7%, 3% and 4% rise in comparable sales, respectively.

Philips reported a net income of €640m compared with a net loss of €39m a year earlier. On a full-year basis, earnings more than doubled to €1.5bn. The company expects overall comparable sales growth of 4-6% for the next 3-4 years.

However, the Dutch company said that its operations would be significantly affected by the outcome of an ongoing civil dispute with the US Food and Drug Administration (FDA). The regulator is investigating the company's external defibrillator business in the US.